Unfiltered: HMOs & Growing My Property Biz (with PropertybyKazy) Artwork

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The HMO Podcast

Unfiltered: HMOs & Growing My Property Biz (with PropertybyKazy)

August 20, 2025 • Andy Graham • Episode 322

In today’s episode, I’m sitting down with Kazy from Property by Kazy for a no-holds-barred conversation about my journey in property and what it’s really taken to build the businesses I have today.

We cover it all—the hard truths, the challenges I’ve faced, the mistakes I’ve made, and the realities that don’t often get talked about. But it’s not all doom and gloom—we also dive into the exciting opportunities ahead for property investors and why, despite the ups and downs, this journey is worth it.

This is my unfiltered take: the highs, the lows, and everything in between. If you’re building your own property business and finding it tough, maybe slower than you’d like, I think you’ll take comfort in knowing you’re not alone—and that you’re probably doing exactly what you should be doing.

Hopefully this episode inspires you, motivates you, and above all, keeps it real. From the very beginning of my story right through to my latest deals, this is the most complete picture I’ve shared of my journey so far.

Here’s what we cover:

02:54 – Understanding HMOs, The Student Market and Its Benefits
15:15 – Systemisation in Property Management
18:58 – Building a Property Portfolio
24:05 – Transitioning to Education and The Value of Mentorship
33:08 – Commercial Valuations and Market Risks
37:54 – Common Mistakes in HMO Investing
39:42 – Current Projects and Future Goals

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Andy Graham (00:02.67)

Hey, I'm Andy and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio. And what began as a short-term investment plan soon became a long-term commitment to change the way young people live together. I've now built several successful businesses. I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

Andy Graham (00:40.62)

In today's episode, I'm sitting down with Kazy from Property by Kazy for a no-holds-barred conversation about my story, about my journey, about investing in HMOs, about what it's really taken to build the property businesses that I have. Kaz was a great host and we covered loads of stuff, the hard truths, stuff that I don't think people will often tell you, the challenges that I faced over the years, the mistakes that I've made, the realities behind it all. And we also discussed the opportunities, the stuff, the exciting stuff, the good stuff that I think is ahead of us as property investors as well. This really is my unfiltered take. It's my experience.

And I think that for anybody who is building their own property business, but perhaps struggling, finding it difficult, perhaps it's going slower than they hoped. I think today's episode will remind you that you're probably doing exactly what you should be doing. Hopefully this is inspiring. Hopefully it's motivating. Hopefully it just keeps it real. And hopefully it's interesting. There's been ups, downs, probably heard bits of my story before. I think that this is a really good opportunity to kind of listen to it all right from the very beginning, right up until what I'm doing right now and the latest deals that I've done. So without further ado, please sit back, relax and enjoy today's episode of the HMO Podcast.

Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment, but before we do, I want to tell you very quickly about the HMO roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO roadmap really is your one-stop shop. Inside the roadmap, you'll find a full 60 lesson course delivered by me, teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future.

We've also got guest workshops added every single month, we've got new videos added every single week about all sorts of topics, we've got downloadable resources, cheat sheets and swipe files to help you, we've got case studies from guests and community members who are doing incredible projects that you can learn from, and we've also built an application just for you.

Andy Graham (02:48.888)

that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. To find out more, head to theHMOroadmap.co.uk now and come and join our incredible community of HMO property investors.

Kazy (03:10.126)

And we are back for another episode of the PBK podcast today. Today I'm joined by Andy Graham. How you doing? So we're having like a podcaster off today, right? I think I just reached a hundred episodes. You have way, way doth that with 300 episodes right now.

Andy Graham (03:28.654)

Well, over 300, which is pretty crazy. episodes, three or four years old now. That's correct. So the HMO podcast,

All things, HMO, I know there's, there is crossover from other elements of property. Yeah. No, HMO.

Andy Graham (03:42.894)

Difficult to get it confused. Yeah, all HMO. We're an inch wide and a mile deep on HMOs.

Kazy: Yeah, you also run multiple channels. You've got the HMO roadmap, which is effectively your community. That's right, isn't it?

Andy Graham: We've got the HMO community, which is our community across a number of different channels. And then the roadmap is our actual digital platform, which is our membership and lots of educational tools. And we've got lots of partnerships. So a bit of a one-stop shop really for investors and wherever they are in the country, even in the world now.

Kazy: All things HMO and wider field. I think let's start really basic because this isn't the HMO podcast. So for some people, they might not even know what HMO is. So let's just start there with you.

Andy Graham: So, what is a HMO? At its very fundamental level, it's just a house shared by three unrelated individuals. Above that, you've got different legalities and technicalities that kick in, licensing, planning permission, and it gets increasingly more complicated the more people you want to put in a space, essentially. But I've been investing in HMOs since about 2009. Bought my first one when I was in my early 20s, just after I was a student myself. I bought a house, turned it into a student property.

Andy Graham (04:54.348)

and put five students in. I still have that today. It went well. And I always saw it as a great way of just maximizing the yield. And I was always interested in real estate and I liked the fact that that yield was asset backed. And for me, HMOs has always been, and I think still continues to be just about the best performing asset class in the property space.

Kazy: I think we find out a lot of people that I speak to in the HMO space, a lot of their first introduction to HMOs was their student life being like, this could be better. Like I had a good time, but I could have had a much better time if my standard of living was better. Do you think it's important that you actually, the demand came from you experiencing

Andy Graham: First hand, yeah. And I think that that was what sort of shaped part of my mission, really. Of course, it was an investment objective, but at the same time, when I was at university in 2006, 2009, so quite a few years ago now, the landscape in terms of standard accommodation was so different to now. And I just saw what I thought was a huge gap in the market. This was before the platinum standard PBSA blocks that we see all over the place now, but particularly in the private space, the HMO space, there was just such a gap for that sort of accommodation. And I thought you could combine getting those great results economically, but also providing much better accommodation. And I thought that was a great business model and that's kind of really where it all started for me.

Kazy: Cos I feel like, for example, like renting a room used to almost be like a dirty word. It was akin to the slum landlord that you just you put in as many people in a property as possible, overcrowding, but now it's really changed and co-living is a beast all by itself.

Andy Graham (06:39.838)

That's the popular word isn't that, co-living. But what I would say is that it depends on what you're reading as to what the opinion of landlords and HMOs are. It's still very, very difficult. The anti-landlords sentiment is still so incredibly strong and HMOs, unfortunately, kind of the dirty end of that stick as well. And we get beaten with it so hard. And you and I know, we see so many people, we do projects ourselves that are incredible and really completely contradict that narrative. But it's very difficult to shake. And I think there's a deep cultural issue in Britain that you and I alone, we're not going to be able to deal with. We're just sort of trying to steadily chip away at it.

Kazy: And I think for a lot of people, there is a very particularly British sentiment that like an Englishman or English woman's home is their castle. And I think the idea of that being a shared space isn't something that sits well with a lot of people. But the reality is us never hitting new build targets in terms of new homes with wages not rising as exponentially as the cost of property to create a good standard of living. A lot of people are willing or more than willing to share a space to have a lot more disposable income.

And when I speak to my tenants, and I'm sure you get the same, a lot of them are so much happier in their house share, particularly if they've navigated to a new part of the country. They've now met friends, they've now got great relationships they built, but also in a space where they don't feel so isolated.

Andy Graham: Definitely. The housing crisis, the issue is deep rooted. There's so many factors. Lack of housing is one of them, but you can really boil it down to a number of different things. And actually I think a lot of the noise, the anti-landlord sentiment, the anti-HMO sentiment, It doesn't tend to come from our tenants. Cause actually there's a real benefit for many of them. They're quite transient, moving around, work, employment's changed.

Andy Graham (08:27.468)

people coming out of university and they're prepared to travel and move around a bit and want that flexibility. And that's changed over the last 20, 30 years. So I think the product that we were able to offer actually suits a lot of people, but there's no doubt at all that for some people it is just a necessity because they can't afford to rent and save at the same time for their own property. And that's not something you and I are to be able to change on our own cars. I think providing good quality accommodation is the role that we need to play. And I think we do that. certainly do that in my business and intend to continue doing that, but there's a lot more that's got to happen outside of these four walls to kind of fix this big issue that we've got.

Kazy: No, definitely. What would you say is like your average kind of tenant type now?

Andy Graham: My preference has always been students for a few reasons. I like predictable models and scalable businesses and the student model for me was always a great example of that. The Renters' Rights Bill is going to change things up a little bit, but the academic cycle means that a lot of your work can be planned in advance. You get quite busy at certain times of the year with students when you're letting and then when you're doing your check-ins and check-outs. You've got periods of time where you can get in the property and do some work. You've got one tenant, one tenancy, five or six tens however many on one tenancy agreement, you just reduce the admin burden. And that's a great model. And student tends, they've got a bit of a reputation.

Kazy (09:49.07) Going to ask you, because I've never done students, like, what is it really like being a landlord for student tenants?

Andy Graham: Honestly, of course there's still a group of tenants that are difficult, but I can tell you, hand on heart, and I've got a lot of buy to let, standard resi stuff as well, that is way more difficult.

Kazy: I'm trying to put myself back and I'm trying to be accountable for my attendant life. And I do remember, and I'm going to have to mention him, Chris just randomly turning up like as we've got a dog now. And I was like, okay. Somebody else like this person's coming to live with us for a little while. Okay. I think students can be a little bit more random in terms of the things they bring in, but you said generally you feel like you've had a good experience across.

Andy Graham: Yeah. I mean, look, I'm not under any illusions that our tenants are perfect and behind closed doors. They're not doing stuff that we would prefer that they weren't doing. But on the whole, they're a great tenant because they're often accountable for one another. The tenancy agreement, they do tend to keep that in mind at the end of their tenancies, getting deposits back and things like that. And I've never had any major issues with groups of tenants. I had some difficult issues and difficult tenants and frustrating issues, but nothing that would ever dissuade me from going with students.

And I've done a lot of professional letting as well, professional HMOs. They're similar tenants, a little bit older with a little bit more money, but essentially the same people. And they're not as accountable for the other people in the house because they're typically on separate ASTs, certainly have been today. And that just brings a lot more work. So for me, very similar people, but just the way that the property and the tenancy is constructed is a little bit different.

Kazy (11:21.56)

With student tenants, do you generally do 12 month contracts still or is it bridging the academic year?

Andy Graham: Yeah. So generally speaking, and it's slightly different depending on which university town, but I typically do 51 week lets. So my tenants will move in on the first of July. They'll stay for 51 weeks. And we use that last week of the year to get in, do our remedial works, clean, inspect, get it ready for the new tenants. And that just helps me and our team because it can be a pretty stressful week. Otherwise we used to do it kind of, it was literally, we had one day of change over and a lot of people still do it, but you'll go old fast doing that.

Kazy: I do it in the single-let space, but again, it's like what happens is the people that are there have been there for a year, you'll just get used to something that maybe just doesn't work perfectly. And there's no complaint. They've not told us, we have no idea. Somebody new comes in and it's like, right, this is a little bit like this, that's a little bit. And now the cost of actually doing those repairs is an afterthought when somebody's already there. A lot of the time would be more than the week, for example.

Andy Graham: They would. It's a great point Kaz and the really critical thing in my experience is to make sure that you set off on the right foot with your Cause if you upset them and mom and dad are upset, that tends to linger for a long time and these tenants are going to be in your house for a whole year. Last thing you want is them moving in, being unhappy on day one. So we try and really get ahead of that. It's really perfect. And you can imagine, I mean, I've sold my agency now, so I used to have a lot more to consider than I do now, but we would be turning over 100 properties in a week.

We've got cleaning teams and maintenance guys and decorators and my team running about all the place. It's incredibly stressful. And of course there are mistakes. And I remember one particular day, one particular changeover, I would always chip in and help. I'd get involved and everything was fine. And then we had a really horrendous downpour and sort of three leaks came through and, we hadn't had rain for a while and all of sudden the day we've got tenants in the beginning, three of the leaks roofed. And we just wouldn't have known about it. And of course tenants turn up and they're upset.

Andy Graham (13:24.14)

Dad are upset, so we've got to fix that. you kind of take it off with a smooth, but generally speaking, if you're proactive, students are really great, telling us to manage and they'll look after your house and it's a great business model.

Kazy: That’s good. I do feel like rain is that thing that when it rains really heavily as a landlord, I think everybody else is like, it's raining, that's annoying. And I can't go out and play football, whatever they was going to do. I look at I think I hope there's not a leak because I do feel that out of all of my contractors, roofers are the only people you just need them when you need them. And when you need them, so does everybody else.

Andy Graham: I've got some stories about roofers and it's not every roofer, but I found that roofers in particular have been quite difficult trade to manage. I've had roofers before send me pictures of work that we've asked them to go and do only to later find out they've sent us a picture of another house and another roof and our roof is still leaking.

Kazy: And listen, I think there's great people in every field and there's bad people in every field. But I think because there is that element of, well, if I'm not going to go up on the ladder or the scaffolding, if I don't have to, I've gone to places where they said they fixed it only to find out it just a tarpaulin on top and nothing has been done. And they were planning to go back next week.

Andy Graham: It's all part of the game, right? Maintenance, dealing with contractors. It isn't an easy industry to crack and you get better at it over time, I found. Reliable tradesmen and a reliable team is so important in this game because it is a people game, but it can be hard at times and especially construction and maintenance is fairly unregulated. Some of it, plumbing and gas and electrical stuff, it's a bit more regulated, but there's a lot of stuff that's still unregulated and anyone can sort of try and turn the hand to it.

Kazy (15:03.726)

little bits. Yeah, I find out. I think it's really interesting you touched on like, you know, the 51 week contracts because that's systemization. I think that there's going to be so much information with 300 hours and hours of episodes that people consume content. But now we want to give people a little bit of value. So in terms of some systems that you think for somebody running their own or managing HMOs that they can implement, like the 51 week contract, are there any other things that you think have really helped?

Andy Graham: One thing about property, especially as you build a portfolio, is that the admin slowly kills you. You can spend more time dealing with the admin than you should be spending on growing the business. I've seen that happen to so many people. I think from the outset, building processes into your business, actually writing down processes that mean you can give it to somebody else and start to outsource tasks. Even if it's just something as simple as the bookkeeping or you're managing the finances, really, really important to do. If you're going to do the inspections yourself, have a simple process, have a Google form.

Something as sort of primitive of that will actually help to no end. But I think there's an awful lot to do and that's the key thing. And it can be overwhelming. So starting with the end in mind. So if the end in mind is I want to build a portfolio to give me an additional income stream, but also get my time back. Make sure that you continue to find ways of simplifying tasks, delegating tasks, just eliminating things that you grow out of, you don't need.

And over time, what you'll find is that you can build a more efficient process and a more efficient system. Hopefully that allows you to keep focusing on the next project and the next refurb and the income generating stuff. And you can leave the lower level admin to other people. I think with AI coming through as well, there's lots of systems and management systems, like for example, Coho, that you can use to do most of what you need from a portfolio and tenant management perspective now. And I'd highly recommend that just things like compliance and the reminders to get your certificates done and stuff. Once you've got a few properties and other stuff going on, it's really easy to forget this, not plan it and lose track of where your contractor's details are. So really simple systems like that, but from the outset, I'd recommend everyone thinks about.

Kazy (17:14.702)

I think that's it. And I think one thing, there's a lot of new systems and when we're in a place where tech is developing, there's going to be a lot of platforms that you can get involved in as an early adopter. And when you do the price point, they're going to start with is going to be a lot less in terms of where it's probably going to be in a year's time when it's very established. So if you're a business in your infancy, a lot of the time you can use these other businesses around you that work really well. I used to have a rent to rent sort of co-living business and I think I had sort of 300 rooms under management.

I mean, I used a company called Good Lord. But the point they came out, Good Lord were a lifetime membership, three, four, nine. They're now, think, three, four, nine a month or maybe more than that. So again, those early adoptions is probably over the course of the last sort of five years has saved me in the tens of thousands of pounds.

Andy Graham: Yeah. And as a small business, those subscriptions that creep in as you just try and find another way to automate or systemise something over time, they really start to take a bite out of your business. but that's as a business owner, you've got to have that foresight. Okay. Where am I going? What do I want to do? Sometimes it's worth over-investing to know that you can grow into something like that. But that's, as I said, if you start as you mean to go on, you'll find it a lot, lot easier. And also you'll just make your business more profitable.

Kazy: Yeah, I think it allows for that scale as well. And that's So you said 2009, first HMO. First HMO. So that was like your proof of concept. Okay, this works. I found something. Where did you sort of snowball from there?

Andy Graham (18:44.406)

Well, it didn't snowball for a long time. That's the truth. And I think that a lot of that was naivety on my part. I just thought having a property or a couple of properties would be all I sort of really wanted. I wasn't thinking about the long-term, my sort of grander plans and stuff like that. I just wanted to get a property, have a bit of cash on the side of my job. And I started like that. And I think because I did, I ended up growing the beginning of my portfolio quite slowly, but I did the first project.

I was making a bit of extra cash. I went back to live in the Southwest where I was based at the time and continued to save, had that additional income, added that to it, had the experience of the first one, decided a few years later to do the second one and then the third and then the fourth. And really at this point, I had no idea about raising finance or that thought hadn't even crossed my mind. I was just working really hard to save, do the next one. And then a couple of refinances crept in and I sort of realised, this is maybe gone up in value. could maybe take some money out. Didn't realise that I'll do that. And I'll add it to the next one.

So it's really slow doing the first few, but I had my stripes and then I had a bit of a life changing event. I was unwell. I was probably about 26 at the time. I've spoken about it in my podcast. So I don't mind sharing it, but I was diagnosed with thyroid cancer when I was 26 and I'm fine now and it's all sorted. But at that point, I was really healthy. I was surfing all the time. I was training in the gym. I was super fit, but that happened, felt like it was completely out of my control and it just changed the way that I felt about everything. I felt like I'd been living quite a cautious life in many ways and to really, to to sit down with people and have them talk about success rates and percentages and things like that really changed the way I thought about everything.

So I decided to take my business much more seriously. I realised that actually I didn't want to sit around and just wait for things to happen. I really wanted to take control. So I took a bit of time out. And when I came back, that's when I decided to really try and make things happen.

And I started to look at raising finance. I recognised that because property is so capital intensive, I wasn't going to be able to do this all without doing something else at the same time. So I started my business. That was the investment management agency I grew for many years, which I then sold. But that gave me lots more experience that allowed me to accelerate. It gave me a platform to work with investors from, build my network, find more deals.

Andy Graham (21:10.35)

And that's when it really started to snowball. And it was a tough few years and I really kind of put everything I could back in that company. I almost had to pause buying stuff for a little while while I focused on building the business. But I knew that if I just got that right and cracked that nut, that would then help me. It would open doors to buy more, expand, scale things up. And that's exactly what it did.

Kazy: I think it just goes to show the importance of focus a lot of the time, you know, a lot of accidental property investors are like, well, I've got spare money and I want to plant it somewhere versus actually this is a goal. What steps am I going to personally take that are going to allow me to achieve that goal as efficiently, as quickly as possible with the business? Why did you choose to sell it?

Andy Graham: I sold that business maybe 2022, 2023, and I think I'd taken it to really as far as I could take it. I'd managed thousands of tenants by this point and so many projects. I was managing a team and during the pandemic, it was running so well that I wasn't doing anything at all because we had the systems and the processes and all of that was working. That's a good time. If you think about, if you've got an exit plan, that's the time to do it. Cause I wasn't a key man in the business anymore.

Kazy: They didn't need as much of a transition period while you sell the business, but we need you for an extended period.

Andy Graham: Exactly. Exactly. Which makes it a much more attractive sale. And you know, I think to take that business to the next level, it just needed somebody with a different objective. My priorities have changed. I think that I'm probably pretty good at that early stage and getting things set up and running. I'm not really the guy to stay there and that bit doesn't excite me quite so much. So right time, right person, right money. And yeah, I decided to take advantage of that opportunity to pursue really

Andy Graham (22:57.74)

my other businesses that had been building in the background. I'd started to buy a lot more and I was starting to do some smaller developments. So multi-unit freehold blocks. I'd also almost accidentally built, started to build a community and I was getting lots of opportunities off the back of that. And during the pandemic, when I had loads of time, that's when I decided to try and do something with the community and try and serve them better and see if we could build an income generating business from it and that's what we did.

So we built a membership platform, which now we see a lot of those things, but actually whatever year this was 2020, that was quite early, especially in the property space. And we made an education based platform and we've over time, started to bolt on partnerships and then itself became a really great business with lots more opportunities and I was enjoying it as well. So the combination of that, which required all my skill and experience and my contacts that I'd already had plus my developments, which was long-term always where I wanted to go. I wanted to continue buying and building. It was the right time and it made sense to continue with those businesses.

Kazy: Did you ever get much of a pushback on the subscription and education business? Because we see a lot of people, particularly on social media, saying that the common tagline is, if you're doing so well in property, why are you selling courses? I guess it's like the line.

Andy Graham: So I've never personally had that, but I fully appreciate that. And actually, and I've talked about this on my own podcast. I realized early on and just rewinding when I decided to take things a bit more seriously and really look at folks, like you say, how I was going to get to where I wanted to go. Building a business, a proper trading business which does what I call fast pounds, makes money quickly.

Andy Graham (24:45.582)

was a really key part of it. Property investment is so capital intensive. It is just a slow game. Like it doesn't matter how good we are and how many contacts we've got. It is still a slow game.

Kazy: It is the like the honest unpopular opinion of property. It's not a get rich quick scheme..

Andy Graham: That's the reality. So if you want to get to a certain level in a certain amount of time, it's really easy. You can just look at, well, if I want this much income, I can make a sensible assumption that to generate that income, I'll need a capital base of whatever amount to get from where I am now with the capital that I've got to get to that capital base. You can figure out how many properties you're going to need to buy, how much value you're going to need to create. If you're ambitious, those start to look like pretty big numbers pretty quickly. So it was clear to me that was never going to happen if I was having to draw from my development business at the same time.

So building my income generating businesses was absolutely a key part of it. And I've said it in my podcast, the quickest way to build your property business is to build a trading business. And for me, all my skills and experience and contacts were already tied up in this industry. I've been doing it by this point for well over a decade, maybe 15 years.

So it made natural sense to me and it folded in quite beautifully really to everything that I was doing. It wasn't that I needed to do it. It just was a great adjunct and helped me accelerate. I think the caveat to what you said, and I totally agree. There's a lot of people teaching stuff that are potentially under qualified to teach it. I think it's really important. I think even in 10 years, have you really seen a life cycle of a property? And there's people that will build programs and sell stuff after just doing it for a few years. And my worry with that is.

Andy Graham (26:23.31)

do you really have the full breadth of experience to be able to share that and people can make their own decisions. I've always been super conscious of this. And one of the things that I've tried to do with our platform is make sure that it's not just about me either. We've built a platform by the community, for the community. So we try to be unbiased, bring lots of opinions and experience, lots of different ways of doing stuff. So yeah, my stuff's in there, but there's also a lot of different ways from lots of other people in there as well. And I think that's one of the things that makes us quite unique, but it's a great business.

And I think, If you can and you're intelligent, you can find a way of folding something in, trading business into your property business. For me, I think that that is the perfect combination.

Kazy: If you spend 10 years understanding something, I think for me, the light bulb moments when I was talking to people, I only realised how much I knew when I was able to help other people solve their problems. And actually sometimes it's a really good reinforcer of being able to help, but actually seeing the results of your experience or expertise, your contacts, being able to assist those that probably would have got there, but probably a lot slower and probably would have made a lot of the mistakes that you and I made along the way as well.

Andy Graham: Definitely. I've recorded a podcast and I've talked about this loads before, one of the best decisions I ever made was when I decided to get a mentor. And it was around that time that I decided to focus and take it seriously. My mentor helped me scale things really quickly. He gave me the confidence and the encouragement that I needed. I wasn't getting that from my friends and family. I didn't know anybody at all in the game. And he helped find ways to accelerate the process for me. And I went and raised hundreds of thousands on one of your biggest crowdfunding platforms, which was incredibly unique in our industry to do that for a property business.

Not something that I had any experience of doing and certainly didn't have the confidence to do it. And that's just one example, but yeah, finding the right people and the right information can definitely help you accelerate stuff. There's no question about that. The flip side is there's loads of free stuff and you and I record podcasts and there's loads of good information, but piecing it all together. That's the really difficult thing because just because you and I do it or just because someone else

Andy Graham (28:26.402)

does it or tells a story doesn't necessarily mean it's right for somebody else. And the really difficult thing when you don't have the experience is trying to fit together the information that you've got access to with what it is that you really need to do and what you're trying to achieve. And I think that that's where a really well structured course or program or mentor is worth its weight in gold.

Kazy: That's the real difference. I always tell people, look, all of the information is out there. Like there's not new information that the super secrets that nobody's ever heard of, but it's what's right for you. And what also is going to make the most sense for you based on who you are, the resources you have, risk tolerance and everything else accumulated into something where someone can say, actually, I understand that deal. I understand why it would work, but everything I know about you means that's probably going to be a real problem.

Andy Graham: And that piece of advice, just being able to say that to somebody could be the difference of them actually making it work in property or not. The biggest risk is you make a mistake that costs you a lot of time and a lot of money. And not only are you not where you want to be, but you're actually further away from that goal. And so many people give up at that stage, which is heartbreaking to see, but sometimes you just need that person to point it out.

Kazy: Sometimes it's two things. Sometimes you don't see someone to say, everything you said is bang on, go for it. And they don't get stuck in that. But what if they just get the confidence to say, okay, somebody who's been there before said, just go for it. And sometimes like, I'm like, I sit down with like one of the guys or girls and they show me this deal or show me something. I’m just like, I'd love to say it's a good one. But it's just not, but it's not because of this, this and this. So if you find something that doesn't have those issues, I say go for it. And I think those little things of just somebody who can just be your sounding board can make such a massive difference. With you like 300 episodes in, what still motivates you to sit in front of the camera or pick up the mic and say, right, we're back again because we're talking about HMOs very specific. How do you stay motivated?

Andy Graham (30:26.408)

Yeah. I think I'm really fortunate because I love what I do. I get really interested in property and architecture and business and a few different things motivate me. Like stepping back from just the podcast specifically, if I was to ask myself, you know, what really motivates me, what makes me get up and want to build the businesses, it's two things. One is this huge fear of being inadequate and one day not achieving my potential.

And the other thing is losing the freedom and the independence that I've already built and created because of other things around me that might change. So I just had a daughter recently, my wife and I, and thanks man. And the ability to just spend as much of the time that I want with her and my wife at the minute is, that is so important to me. So that is a huge driver for me, working hard and doing all this stuff to make sure that I've got that choice, which is why I did it in the first place.

That certainly helps me get out of bed and do it. But in terms of the podcast and HMO specifically, I still believe that in an economy that is shrinking and getting increasingly difficult to see the same margins, HMOs are still pretty much the best performing asset class if you're going to buy real estate in the UK. And I think done right, it's still a really good and scalable model. And I still think there's loads of opportunity and the podcast for me has loads of benefits. get to meet loads of people.

I get to just get stuff off my chest, but also it helps me raise finance. It helps me bring deals in. There's lots of additional benefits to the podcast like that. And of course helps with growing the community and building our membership base and stuff like that. So it's multifactorial really.

Kazy: Yeah, no, definitely. I think that the side of it like it being almost like a mini weekly therapy session where you're like, right, I can vent. I can see other people are going through the same things. I think it for me personally and getting to speak to other experts effectively for free is a great bonus for me as well.

Andy Graham (32:22.442)

And the podcast for me is a comfortable environment. I don't particularly enjoy being on social media or being behind the camera. It's not really what I actually want to do. And I don't feel that comfortable doing it, but behind the podcast, just in my office, I feel like I'm in my safe space and it's okay. And it's a great way for me to connect with my audience. And I know because we get loads of great feedback that a lot of people do find it really useful. And that is just gives you that nice warm sort of feeling, which actually it's not about the money or stuff like that. Actually, that is also just a really nice thing to be able to do and get from your work.

Kazy: Yeah, nice. Really, like I said, massively after you listen to this, only after you've listened to this one, definitely go check out the HMO podcast is something I'll consume regularly. I think it is really good. And a lot of people that, I don't specialize in HMOs, I always just say that when people are getting started, I just consume as much as possible and work out what you like and you don't like. You touched on obviously that for you personally you think HMOs, one of the best asset classes when you come to investing in UK real estate.

And I sort of had this conversation with a few different people. My only concern when it comes to HMOs is particularly around the commercial valuation side. When we look at commercial valuations in comparison to bricks and mortar. And I guess I'm going to kind of give you a scenario and I just like your opinion on it. So for example, if you're investing in somewhere and it could be, think somewhere I don't know the values of, but it could be anywhere. If you're investing in Portsmouth for argument's sake and you're buying a house for the bricks and mortar valuation is 300,000.

But because you've either converted to a six or a seven bed all en suite, you've got a commercial valuation and that's coming in at 500. I think I guess my only concern would be if you're at sort of 75% loan to value, is there the liquidity for this asset if either rates move or is there actually like a market that would come and purchase this asset at the 500k?

Andy Graham (34:18.264)

Well, that's the million dollar question. To ask that question is to basically think like the bank, that this is what the lenders are thinking. So from my personal perspective, commercial valuations and creating capital through that method has a role. It's not something I do, but it's because that my risk profile and the way that I want to try and create capital is a little bit different. But if you're at the early stage of your business and your priorities grow, you have to take additional risks. You can't have your cake and eat it.

So taking a commercial valuation on, you want to make sure that you've got the rental confidence. Like most importantly, am I going to be able to rent this consistently? Do I have the data to support that? Do I have the processes, the system, the people to make sure that that's the case? And all the factors will help. If you're nearby the asset, it will help. If you're a four-inch mile away, it's going to be harder. But at a point in your business or one's business, that might absolutely be the right thing to help just get through to that next step and that next step and that next step.

And then maybe at some point might reduce that risk profile, pay down some of that capital, maybe sell one of the assets to pay down some of the other mortgages, whatever it might be, and bring it to a more comfortable level. Because the reality is a commercial valuation, that element that's commercialized, that is not asset backed. It's yield backed. So if that yield dries up or gets a shrink, you've got a challenge. My personal strategy at the minute is I kind of look at my HMOs as one bit of a store of wealth now.

And two, a good income generating asset on the back of that. So it almost pays a really good dividend. But the reality is for me, like the stuff that I buy and the HMOS that I buy, they are quite expensive. It's difficult to add value to because I'm buying good prime student stock. And actually I want to get in those deals and I want to get out very quickly. I don't want to spend too much time. They're a bit more of a cookie cutter strategy to me now, but I can only do that because I'm able to create income in other places.

And more importantly, when I look at my much bigger overarching objective, which involves or requires me to build my capital base a lot more. The ability to do that's not going to come from these sorts of projects. I need to be buying bigger sites and adding a lot more value. And I take a lot of risk, but I buy commercial stuff, convert it to resi with my business partners, those sorts of projects. And that's where I really focus on adding my value now. But I can only do that now because

Andy Graham (36:40.042)

of the experience that I've got and the contacts and the finance I'm able to access. It was different when I was getting started. So it's another great example of what will you want to do and what's right. It kind of depends on you and your timing and kind of where you're at in your own process, really.

Kazy: Yeah, I think that's a great answer because when I hear people that really focus on HMOs a lot of the time, they speak about the commercial valuations and the uplift as if that can go on forever. But my risk or my mental, probably me being quite risk adverse, I'm like, that just sounds scary that you've got all of these really overvalued assets that are really pinned to, as you touched on yield, that can't necessarily go on forever. And I think it's great advice from someone who's been there and seen it that actually, as you grow to a certain point, you actually do want to de-risk because those assets become exactly that, stores of wealth. They become your kind of stability. I can't go broke funding the background that allow you to take more calculated risks in other areas. And I think that's a great way to perceive it.

Andy Graham: So you start with the end in mind, nobody, well, I don't know anybody who wants to get to their sixties and seventies with a huge portfolio with loads of difficult tenants and over leveraged. The idea is to get to a nice place where it's comfortable and the mortgage is all paid. You've got a nice income stream. You're not getting any problems. You're not going to lose any sleep at night if interest rates spike or you have an issue with occupants. You want time to be able to fix these sorts of things. So when you do that, the right time depends different for everybody. But I think that that is the foundation of a good plan. Certainly, in my opinion, it is.

Kazy (38:11.256)

That makes a lot of sense. Before we go over to some of your bigger, more recent projects that you've been working on, I just want to hear some common mistakes that you think that HMO investors make that you hear from maybe some of the community members who say, don't do that.

Andy Graham: Yeah. The most prevalent mistake I would say is chasing yield around the country. When I give anyone advice, I'm always really conscious to say, look, you've got to take this with a pinch of salt because I don't know your circumstances. To answer this question fully, I really need to know everything about you and what you're trying to achieve here. But what I see a lot of people doing is overlooking their actual objective, which is usually to, yes, generate some income, but also maybe get out of a job, have more time back, spend more time with the kids and the family.

And instead start chasing yield around the country. They look at deals close by, numbers don't quite work. They're going to struggle to do the next one. So they look a little bit further. Before they know it, looking three, 400 miles away. Now, that's fine as long as you understand that that comes with its own challenges. And sometimes those challenges, they're not just challenges. Some of them are absolute certainties, but some of those points will conflict with the objective.

So the question is like, how much are you prepared to compromise on? You're prepared to take on a little bit of that and maybe have a little bit of less time with your family and stuff like that. Cause that's the reality. But chasing yield around the countries, it can be dangerous giving the job to find a good property to a sourcing agent who's on the ground up there without spending the time to really understand, become an expert in a location. That is kind of crazy to me. Spending that much money and investing that without having the confidence that you need. That's the big one that worries me.

Kazy: No, I think that's great advice. So in terms of you spoke about having quite grand plans, what are projects you're currently working on at the moment, the types of projects you're working on?

Andy Graham (39:59.458)

So from a development perspective, myself, my business partners, our real focus is on commercial to residential for a few reasons, but largely from a planning perspective, it's just, it's not easy as you know, Kazy, but it's a little bit easier, a bit more predictable, but commercial to resi schemes are a great opportunity to buy at good brick and mortar value, add a lot of value through planning and development.

Kazy: And with these schemes are you generally going down the PD route class MA or are going full planning?

Andy Graham: So we've almost always gone full planning, but what we will look for is sites that have, so almost a minimal viable product

Kazy (40:41.358)

To give you a safety net, the like worst case scenario, we can dial it all the way back. Exactly. get out and not lose money. Exactly. But we can also scale it up to best case scenario, which could double the value potentially.

Andy Graham: Exactly. A good example, an industrial type of building, long rectangular building, windows in either side, that's permitted. We can convert that to residential without making too many changes, but we might want to maybe optimize the floor plan, which might mean moving some windows and doors around. It might mean actually trying to get a few more units by going into the airspace, which is full planning. So yeah, we buy based on what we know we can definitely do and try to stack it around that. But then also we're very much taking into consideration what we think we can do.

And then trying to figure out, and this is where the real skill is, trying to figure out your likelihood of achieving that and how much it's going to cost you and how long it's going to take you to get to that point. But I'm blessed, one of my business partners is an architect. as well as being a developer and having a developer's head, he's an architect with an architect's head. And that's really useful when you're looking at these sorts of schemes, because it's difficult to know planning policy and what you can actually do with schemes without those sorts of specialist skills.

But we try and buy buildings that we can essentially convert to flats, multi-unit freehold blocks and the stuff that we're doing at the minute, we've got a bit of a mix, but we just finished a sort of scheme of 10 in Norwich. We've just finished a scheme of 24 down here in the Southeast. We've got a second phase to that, which is another 13. We're just about to start a site up in the North in Sheffield, which is for another 18.

Kazy: And these are built to rent or built to sell.

Andy Graham (42:13.09)

Built to rent, but there's a caveat to that Kazy. Because of rates at the minute, it's a difficult lending climate. So what developers like us are finding is that at the end of schemes, it's pretty difficult to hold onto absolutely everything because

Kazy (42:28.332)

What are you at? 65 %?

Andy Graham: Well, it depends on the product and it depends on how much they're actually lending on, but there's a few nuances to it. But as one example, there's a number of lenders in the market that will potentially lend up to 75 % loan to value on a block of 10 or less. if you've got a block of 24, you've got a bit of a challenge.

Kazy: The lenders are gonna see themselves as overexposed to you as a client.

Andy Graham: Quite possibly show part of the art is in trying to, okay, well, how do we piecemeal up some of the risk here for the bank? Can we do one bank on part of it and another bank on another part of it? And so you end up having to really kind of work with that.

Kazy: Being a conductor of your own sort, of all the different moving parts.

Andy Graham (43:06.472)

This is difficult because at the outset, you can't predict this. You don't really know in 18 months time where interest rates will be, what products will be on the market with the banks. So you have to plan and have contingencies in mind. But yeah, you might end up at 65% loan to value. And if you scheme, if it's an eight or nine figure scheme, those percents are very large amounts of money.

Kazy: Particularly if you've got investors that need to be repaid. And I think that's why for me, when people ask me like, oh, like you're flipping a lot, but would you say, say, for a lot of the time, the market determines what, there's some things that are out of your control. You create a good product. And if somebody offers me a really good offer to buy the site or the block, then I might sell it. And if the bank offers me a good rate on the rates and I might hold it. But I think you have to be a little bit flexible when it comes to market conditions.

Andy Graham (43:52.93) You really do. And especially at the minute, we don't want to sell our object of it is billed to rent, but sometimes you've got to sell a few just to keep the rest. And sometimes really you want to avoid punching holes right through the middle of a building. So can you sell something that's on one side or maybe just the ground floor units, whatever it might be. But yeah, having that flexible attitude is important, but to have that flexibility means you've got to think about it from the outset because some schemes are really not going to work very well to sell.

They might work great to rent, but what if you can't sell them? And vice versa, some schemes are going to do much better and you're going to crystallize much more if you plan to sell from the outset rather than keep. Because if you've got high value units in a really popular area, they're the most difficult things to lend on to keep because the yield is so low. The stress testing at the minute is really difficult. So even if you have less than 10, then the bank would do it. By the time the stress testing gives you a good old squeeze, you can't keep it all anyway without thinking about either introducing some more capital or selling stuff.

So, but that's the tightrope you walk as a developer. You've just got to sort of have all of these angles covered and be thinking about it all the time.

Kazy: Exactly that. Final question. Where do you want to take this? Because you've been, you said you're almost 15 years in now. You've been doing it for a while. You're very successful already. Like, is there a number, is there a portfolio size? You're like, this is where you're trying to get to.

Andy Graham: Yeah for a while now, my number, I've talked about this on my shows and I saw a share with you Kaz. I've talked about the 40 million, 40 million represents a yield. I was to crystallize everything represents a yield, I could just put away in something really simple, safe, like stocks and shares and just take a dividend from it. My family, no one would have to think about managing all these assets. We'd be able to do all the things that we want to do. I'd be able to.

Andy Graham (45:44.354)

Think about generational wealth and charitable causes and all of that nice stuff. So I'm building my portfolio towards that goal. That's not at the expense of enjoying the process and it's not at the expense of keeping my risk profile. I want to make sure I get there and I don't need to get there in a great rush. You know, we've done some good schemes with some really big numbers in the last few years. So that's happening quicker than I thought it would do. And I set that goal. But for me, I just want to make sure that.

No matter what, no matter what happens around me, I can continue to enjoy the things that I've managed to put into place now, which I've worked really hard for and I've sacrificed an awful lot, especially when I was younger. And I want to make sure that that remains the case. But the reality is this game does not come without its risks. You can't get into a project with zero risks. So there will be some schemes that do better and there'll be some schemes that aren't as good, but I want to keep building it all. I want to keep enjoying it all.

I want to keep doing great stuff for our communities. And I do feel a real sense of importance and necessity almost to actually contribute to the problem that we do have in the housing industry here. And I think there is a shortage of good quality accommodation and I want to keep trying to help do my little bit and it is only a little bit, but to improve that.

Kazy: No, well, we really appreciate having you on. Obviously, this has only been a snippet of what you can share on the HMO podcast. If you haven't already, I'd massively advise you go and check that out. If people want to connect with you, if they want to find you, how can people get in touch?

Andy Graham: Yeah. Head on over to thehmoroadmap.co.uk. Drop me a message on Instagram. It's @andygraham.hmo, but I'm kind of out and about everywhere. It's pretty difficult not to find me. So yeah, ping a message over. If you need a bit of help, support, advice, whatever it is.

Kazy (47:25.326)

That has been another episode of the PBK podcast. If you've enjoyed it, make sure you like this video, drop us a comment, subscribe, all that good stuff. And we'll be back next week with another amazing guest. Peace.

Andy Graham (47:43.438)

That is it for today's episode, guys. Thank you so much for tuning in. Hope you enjoyed that conversation with myself and Kaz. Hope you found it interesting, my story. Big shout out to Kaz. Thanks for having me on the show. It was an absolute pleasure. And of course, you guys, my listeners, our listeners, we appreciate every second that you give us. And don't forget that if you do want to level things up, if you want to build your business, if you want to push through the challenges, if you want to to find the tools, tips, the tricks, the advice, the guidance, the support, the examples, the case studies, all the stuff to help you do it as quickly and as efficiently and as economically as you possibly can. Then head on over to thehmoroadmap.co.uk. Check out the HMO roadmap. Trust me, if all that stuff existed when I was just getting started, a lot of what I had to share with you in today's episode just wouldn't need to be there. The shortcuts.

The mistakes I made, there's so much that I could have cut out. It's there for you guys to take advantage of. Now I spent years putting it all together. We had new content every single week from members of our community. It's an incredible resource. Please, please, please. If you are investing in HMOs, just go and check it out. It is worth its weight in gold. That's it guys. Thank you again for tuning in. Don't forget to hit that subscribe button. And of course, don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO podcast.